Winning with Data in the Business of Sports

CRM and Analytics

Fiona Green

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000340198
• Edition: 2
• Topic: Business
• Subtopic: Rapporti con i clienti
• Index: Business

New technologies mean that sports clubs and governing bodies are generating more data than ever to help manage their relationship with fans, their performance, and their income streams. This new edition of Winning with Data in the Business of Sports explains how to acquire, store, maintain, and use data in the most effective ways. The key developments are three-fold: new technology, new understanding of how to apply that technology, and the new laws informing and controlling the data that can be generated from the technology.

Important developments that have occurred since the publication of the first edition include the General Data Protection Regulations (GDPR) and the COVID-19 pandemic. With a focus on these unique challenges coupled with the opportunities the use of data creates, this book is essential reading for professionals within the sports industry. This second edition includes:

- An introduction to new technologies, the data they generate, and the supporting processes we need to have in place to use them.

- Brand new case studies with recent examples of creative applications from clubs, teams, leagues, and governing bodies, including Arsenal, AS Roma, ICC Cricket World Cup, LA Kings, Portland Trail Blazers, and UEFA.

- The sports industry's response to tighter data legislation introduced primarily though the GDPR.

- The role of data and direct engagement during the COVID-19 pandemic.

The book provides clear guidance and knowledge that sports industry professionals need to understand the role of data for the business side of sports. It is essential reading for sports clubs, governing bodies and those working in sports marketing, media and communications, sponsorship, merchandise, ticketing, events, and participation development. The book will also be of interest to students of sports management.

Chapter 1

CRM for the digital age

CRM: an introduction

In the first edition of this book, published in 2018, my opening paragraph referred to George Orwell’s words ‘Big Brother is watching you’. I suggested that in referring to the authorities of a fictional totalitarian state in his acclaimed novel, 1984, his readers must have scoffed at the thought of anyone being able to watch them constantly. I pointed out that not only was it now widely accepted that the authorities could, and indeed, were doing this, thanks to digital technology, anyone – not just the authorities – can watch anyone else. The last line of that opening paragraph was ‘not only do we know what people are doing, we can predict what they may do next!’

But then the coronavirus hit, and suddenly everything we thought we knew went out the window. And far from predicting what other people will do next, we were searching for information that would help us just to decide what we would do next. Oh yes, and we were rewriting our algorithms because ‘traditional’ behaviours were no longer ‘traditional’ (more about that in the LA Kings’ case study in Chapter 10).

But despite the huge impact the global pandemic has had on all of us – the natural changes enforced on the way we live, work, and act – there are still a few certainties. We will carry on loving sports, we will carry on playing sports, and at some point in time, perhaps before this book hits the shelves, we’ll be back watching sports, live and in stadiums and arenas around the world.

Until then we had to consume live sports digitally – in fact, we’re doing more digitally than we ever have done before, with Alexia Quadrani of JPMorgan Chase going so far as to state that ‘A permanent shift has taken place across the industry from a linear platform to a digital platform’ because of the coronavirus (Quadrani, 2020).

And so while the opening paragraph in this second edition has been amended to reflect the situation in July 2020, and at the time of writing we don’t know what the ‘new normal’ will be, we do know that the theme of this book is now more relevant than ever: that in this digital world people happily tell us what they’re doing (through digital and social media), we can see what they’re doing (through analysis of their digital behaviour), and through these analyses we’ve got the closest thing we’re ever going to get to a crystal ball.

With people using more digital platforms, consuming more digital content, and interacting more through digital media, this digital activity is generating more data, and it’s this data that provides the cornerstone of CRM and analytics. It allows us to engage with these people at a very deep and personal level, giving us the ability to tell them what they want to hear when they need to hear it. This in turn increases the chances that these people – our customers, fans, or other stakeholders – will then do what we want them to, whether it’s to spend, watch, participate, or engage.

To quote the late Peter Drucker, an industry great, ‘for 50 years, information technology has focussed on the T in IT…. The new information revolution focuses on the I’ (Drucker, 2001). Drucker was an oft-quoted international management consultant described by Forbes as the founder of modern management; so when he said that information, rather than technology, will be the new focus of the IT industries, we knew we should sit up and pay attention.

This is a great starting point for any book about CRM, business intelligence (BI), or business analytics (BA). It perfectly demonstrates how we’ve moved from an era of technological focus to one of data and insight. Drucker died in 2005, but the use of data for business is still largely in its infancy in many sports organisations. That tells us plainly how far behind we are in this area. Back in 2012, Harvard Business Review published an article famously titled ‘Data Scientist: The Sexiest Job of the 21st Century’ (Davenport and Patil, 2012), but despite this, we are still catching up. Today the need for professionals who understand data in the sports industry is rapidly growing. Indeed according to the European Union, data and analytics are at the top of the list of critical skills shortages (Publications Office of the European Union, 2020), with the European Data Market Monitoring Tool attesting that in 2018 there were 571,000 unfilled positions due to the shortage of professionals with data skills (European Data Market Monitoring Tool, 2019).

Oscar Ugaz, a leading consultant in digital strategies for the sports industry and former digital executive at Real Madrid, agrees that this is also the case in the sports industry and shared his thoughts with me in an email in May 2020:

I think there is an 80/20 challenge between how much money you are investing in software versus how much money you are investing in brainpower to analyse all the data and analytics that you are obtaining. Today people are fascinated with data capture and want to have all these flashy products, but they are not investing in people that are capable of understanding the business, taking all that data and extracting insights out of it. [Sports] properties should be investing 80% in professionals capable of understanding the data and 20% in software and technology to extract it. Data is everywhere. What is very scarce is professionals capable of analysing it.

(Ugaz, 2020)

As we look to bring CRM into the sports industry, how can we learn from the mistakes and successes of the many businesses that have gone before us in their quest to become data-driven organisations? Let’s start by looking at what CRM means, and more importantly what it means for sport- rights owners.

Gartner, the leading IT research and advisory firm, defines CRM as

a business strategy that optimises revenue and profitability while promoting customer satisfaction and loyalty. CRM technologies enable strategy and identify and manage customer relationships, in person or virtually. CRM software provides functionality to companies in four segments: sales, marketing, customer service, and digital commerce.

(Gartner, 2017)

I like this definition for two key reasons:

• 1It uses the word strategy from the start. Too often we come across sports organisations that don’t have a strategy or, if the management has defined a strategy, it hasn’t filtered down to the operational teams.
• 2It emphasises technology as an enabler not a driver. Too often, business decisions have been driven by technology when it should be the other way around.

Ed Thompson, a Gartner analyst, discussed the definition of CRM with me via email on 15 December, 2017. He advised that I shouldn’t worry so much about the accepted definition of CRM and that I should instead focus on coming up with my own. At Winners, the company I founded over seven years ago to support the sports industry in this area, we simply define CRM as ‘getting the right message, to the right person, at the right time’. We don’t claim ownership to that now ubiquitous phrase. I’ve tried to trace the origins and have identified three points of reference. In 2004, the deceased mathematician, Benoit Mandlebrot, when interviewed for the book Candid Science IV: Conversations with Famous Physicists, said, ‘scientific creation presupposed three elements – “the right person, the right place and the right time” ’ (Hargittai and Hargittai, 2004). The November 2005 edition of the Harvard Business Review led the marketing section with an article titled ‘The Perfect Message at the Perfect Moment’ (Kalyanam and Zweben, 2005), and then Jerry Della Femina, the American advertising executive, observed in a Financial Times article in 2013 that it’s now possible to target adverts ‘to the right person at the right time in the right place’ (Femina, 2013).

It’s also not the shortest definition of CRM. That honour goes to Don Peppers, globally recognised as a leading authority on marketing and business competition, who refers to the ‘accurate but concise treating different customers differently’ (Peppers, 2014). This book builds on these ideas and will chart how you can get the right message to the right person at the right time.

But what about the right platform? In a world where the term omnichannel is universally used and disliked in equal measure, we don’t feel the need to refer to channels or platforms individually because the world is now channel-blind. We switch from email to Facebook, Twitter to Snapchat, Instagram to Pinterest, and mobile app to desktop without a second’s thought. We don’t care about the channel; we just want the message, content, or interaction. If this is the way your fans, customers, and stakeholders think, it’s implicit that you know what channel to use.

So, we’ve got the right message, the right person, the right time, and the right platform. It’s now left for us to make sure these messages work to achieve our business objectives. Unlike many other industries, sports organisations need to generate revenue, but sometimes selling is not the priority. The original meaning of CRM, coined back in the early 1990s, was about business to business (B2B) software; they were programs that helped sales reps stay on top of their leads as they moved through the sales process, from initial contact to contract signed. This has led to CRM strategies and processes focussing on sales, selling larger quantities, cross-selling, selling more efficiently, and predicting how sales can increase.

Operating in the sports industry, however, we’re acutely aware that the primary business objective isn’t always to sell. Sometimes the focus is on increasing participation, demonstrating governance, and improving reputations. While we know each of these will indirectly bring financial reward, the approach you take to upgrade a fan who has bought a ticket, or one who might spend more for a VIP experience, can seem very different to how you would encourage a retired player to become a coach, or a parent to become a volunteer. But, despite the different end goals, these objectives utilise similar CRM processes that promote engagement in all its forms, and it’s this that leads to the desired result – more revenue and more participation.

There’s no doubt that the principle of a sales funnel, the concept of nurturing a prospect to a sale, and minimising attrition while maximising repeat purchases are all valid, but where we previously might have focussed purely on CRM to optimise return on investment (ROI), we now hear more about return on opportunity (ROO) and return on experience (ROE).

While working with one of Winners’ clients, a major rights owner sponsored by Adidas, Colin Rattigan, VP of Consumer Engagement told me that his key performance indicators (KPIs) are not based on dollars or euros but on engagement metrics and data. When engagement is the objective, revenue is the result.

Intelligent customer engagement

In May 2016 at the CRM Evolution Conference in Washington DC, I was fortunate enough to speak about the use of the term CRM with Jujhar Singh, former General Manager for Microsoft Dynamics, North America. I questioned the relevance of the three-letter acronym in the digital age, and he agreed that it was outdated, adding that ‘we don’t call it CRM in our office – we call it intelligent customer engagement’ (Singh, 2016, 24 May). Shortly afterward, when Dynamics 365 launched in November 2016, those three letters, CRM, had been dropped from the product name.

So, the term CRM is no longer just about the software that an organisation uses to manage its customers and sales processes. It’s become more of a collective concept that describes an entire business approach, driven by access to unlimited data, multiple digital engagement channels, and most crucially, the age of the savvy consumer.

I’ll discuss this more later, but for now, consider that while sports rights owners may aspire to Amazon, Netflix, and Spotify levels of engagement, we don’t do it with an exclusive focus on the sales funnel. We must think of engagement as a primary focus that will then lead to the successful achievement of our business goals and objectives.

Why now?

The sports marketing industry has been around for many years. While the 1984 Los Angeles Olympics hold claim to being the first US event to generate broadcasting fees, the to-the-death arena fights of ancient Rome could also be considered a foundation to what is now a multibillion-dollar global business. Regardless of whether you believe the catalyst was our first formalised approach to commercialising an event or wealthy aristocrats sponsoring gladiators, why has CRM become so important to the sports world that it now deserves its own book?

The sports industry is facing a lot of challenges:

• We’re not...